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The Art of Switching Car Insurance: 6 Things to Know

“Go with the flow” and “don’t rock the boat” isn’t advice to follow when it comes to car insurance. Most of us are willing to let a sleeping dog lie by ignoring our car insurance until forced to take action like changing cars or moving to a different city or state. Even then we probably take the easier path of staying with the same insurance carrier. But here’s the thing, nothing stays the same. You change and so does your insurance. Do you ever really read the changes in your policy and coverage when it’s time to renew?

The best price and coverage for you just two or three years ago may not be the best today. You should shop around every two years. And, after you do the work and find better coverage, here are six fundamentals to follow when switching car insurance, according to

1. Easiest Time to Switch (When to Switch)

Although a major life change, like buying a new car or getting married, forces us to think about insurance at random times, paying that annual premium to renew current coverage is a natural trigger for some comparative shopping. Containing all the needed information (premium cost, coverage limits, discounts and so forth) to shop apples to apples, the renewal notice should be a call to action.

Depending on the state of residence, that renewal/premium notice should arrive 3 to 4 weeks before the new policy period begins. That provides ample time to shop, compare, apply and buy new coverage before the current policy renews.

2. Insure First (Insure then Cancel)

Never cancel the current policy before new coverage is firmly in place. You should never be without coverage, even for a day! Beyond the liability risk of some calamity occurring while uninsured, you also might expose yourself to penalties. Always coordinate the initiation of the new policy with the cancellation of the current one.

3. Opportunity Knocks (Switch Anytime)

Sure, the easiest time to switch carriers may be when the current policy renews, but by law, you can replace that coverage at any time. Life changes, like buying a home with a garage or in a less risky area, are often opportunities for lower premiums. Don’t miss the boat. Even if you pay your premium annually, you won’t leave money on the table if you switch before the end of the policy period. Your current carrier will calculate a prorated rate up to the cancellation date, returning the difference between that and your most recent premium to you.

4. Look Before You Leap (Dig Deeper)

The siren call of a big money-saving discount may grab your attention, but there may be cost considerations beyond the price of the premium. The cheapest price doesn’t always equal the lowest cost. Switching insurance carriers could mean surrendering loyalty discounts with your current carrier, losing discounts on other policies (if you bundle), losing earned accident forgiveness that won’t raise your premiums after a claim or a loss of any other benefits based on the length of your relationship with your current carrier.

Also, include any early cancellation penalties in your calculation of cost savings. A few insurance providers have an early cancellation penalty of 10 percent or so. If yours is one of those, it might be cheaper to wait until renewal time to make the switch.

5. Out With the Old (Put It in Writing)

Cancel your current insurance in writing. If you purchased your insurance online, your provider may have a path for canceling online, but it’s always best to do it in writing. Provide your name as it appears on the policy, the policy number, your full address, the exact date you want the cancellation to take effect, the reason for cancellation, your new insurance carrier and policy number, your signature and the date. Although it will involve a trip to the post office, send it to your insurance company’s customer service address by certified mail, requesting the extra-cost return receipt.

6. Trust, but Verify (Take Nothing for Granted)

Nonpayment of the premium won’t cancel your current policy. It will automatically renew even if you don’t pay the premium. After some weeks or months, the carrier will cancel for nonpayment but will charge you for the cost of coverage before it was canceled. Be proactive. If you don’t receive written confirmation of cancellation before the renewal date, contact the company’s customer service and verify the policy is canceled.

What it means to you: Switching car insurance is your right. Doing it the right way can save you more than money; it can save you some hassle.


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  1. i paid for 12 months, sold my car 6 months later, insurance carrier will not return the 6 months i didn’t own the car…

  2. I cringe when I hear of people wanting state minimums.  This was only touched on in the article but in TX it’s 30/60/25 for liability.  If you hit and total or cause a rollover, $30k per person or $60k for everyone in the car if injured is going to leave you exposed and they will come after your home.  Bumping up the coverage is cheap compared to losing your home or retirement because someone was critically injured and in the hospital.  Of course, get what you can truly afford but don’t cheap out on insurance.  Let the insurance company take the risk and have to pay it out.  It’s really a good deal if you compare the risk you take and the risk the insurance companies take.  The average lawsuit settled in TX in 2016 is over $500,000.  That’s the AVERAGE.  So, this is where umbrella policies come into play.  A $1M umbrella costs around $280/year for the average family.

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